Submitted by Suanne Z. Thamm
Reporter – News Analyst
March 15, 2017 4:39 p.m.
The Ocean Highway and Port Authority (OHPA) of Nassau County, FL held its March meeting in Fernandina Beach City Hall on March 14, 2017. This year, as part of OHPA’s outreach efforts, board meetings are being held around the county to allow greater public participation. Both Fernandina Beach Mayor Robin Lentz and Vice Mayor Len Kreger were in attendance for the meeting that lasted two hours.
Under the leadership of commissioner and board chair Adam Salzburg, OHPA is seeking more public involvement to help OHPA improve its financial picture and realize its economic potential beyond the Port of Fernandina. At the same time, OHPA is moving forward to implement a recommendation of the recent Charter Review Committee to create a position for OHPA Port Director.
All commissioners, including District 5 Commissioner Ron Braddock who has been absent for most of the past two years due to health matters, attended the meeting.
Auditor Pierre LaPorte informed the board that the FY 2015/16 audit has been completed and will come before the board for approval in April. Commissioner Danny Fullwood asked about progress on refinancing existing bonds. He suggested that OHPA needs working capital to deal with pressing issues, such as hiring a port director. LaPorte said that banks are currently evaluating the OHPA request. He suggested that OHPA might look toward establishing a line of credit against which future draws could be needed, once the board decides on specific projects. He also reassured commissioners that money needed to repay the PILOT funds to Fernandina Beach has been set aside.
[A PILOT is a payment in lieu of taxes made to compensate a local government for some or all of the tax revenue lost due to tax-exempt ownership or use of a particular piece of real property. Usually it relates to the foregone property tax revenue. When the Port of Fernandina was established, part of the agreement involved such payment to the city of Fernandina Beach of $50,000 or more each year, depending on volume of shipping handled by the port. Recent payments have been held in abeyance, pending outcome of a Florida Supreme Court case on the constitutionality of such a practice. On March 2, the Supreme Court overruled the Court of Appeals and declared that such payments were lawful.]
Nassau Terminals/Kinder Morgan Report
Val Schwec, Commercial Director for Kinder Morgan, Nassau Terminals, LLC (the operator for the Port of Fernandina), updated OHPA on recent developments which should increase the port’s profitability. He reported that March and April 2017 would outpace the corresponding months for 2016. He cited a new agreement with WestRock that will add over 25,000 Tons annually. Schwec expresses hope that the agreement will eliminate the need for some trucks on and road and perhaps lead to a system of intercoastal barge transportation. He also reported an increase in Somers Isles http://www.somers-isles-shipping.com shipping to Bermuda. Mason Construction has generated docking fee revenue. Lumber imports from Europe, because of the strong dollar, are up to levels not seen since 2000-2010.
Schwec said that an agreement has been signed for the construction phase of fender replacements, with FDOT providing $250K toward this project with a 25 percent match required. OHPA voted unanimously to approve Resolution 2017-2, authorizing the board chair to sign an agreement with FDOT for a 75-25 matching grant agreement for wharf and cargo handling improvements.
Schwec introduced Aaron Dibbaco, a health and safety expert, to report on the port’s response to OSHA citations arising from the crane accident that resulted in the death of an employee last year. He reported that the parties have reached a settlement with no admission of liability. The port will pay a penalty of $16,976. He said that the OSHA investigation is still ongoing and that once OSHA releases the physical evidence, Kinder Morgan will have it examined and evaluated by a third party.
Schwec also reported that Cross State Towing is looking into stationing a tugboat at the Port of Fernandina. Currently, tugs are dispatched from Jacksonville, adding to the cost of the service. He said that many ships today do not require tugs, but those that do must make their own arrangements for services. The same applies to shipping agents.
In response to questions from the public commissioners Schwec explained how he makes projections based upon trends and past experience. He also explained that if a barge service could be initiated at the Port of Fernandina, small numbers of containers could be sent to collection ports for final destination shipping. Such activity could decrease truck activity. He also reiterated that truck traffic, currently averaging 35 per workday is not projected to exceed levels listed in the master plan, unless train service would disappear.
Report of Legal Counsel
OHPA Attorney Clyde Davis advised the board that he had met productively with City of Fernandina Beach officials regarding the outstanding issues of the Port Master Plan and the city’s comprehensive plan; OHPA’s obligation to pay PILOT payments in light of a recent Florida Supreme Court ruling; and waterfront redevelopment. Davis said that in light of the Supreme Court ruling, he believed that OHPA should make the required retroactive payments to the city, but meet jointly with the city to determine the best way forward, in light of the expiration of the Development of Regional Impact in the near future.
OHPA members engaged in some discussion over whether the city had adhered to its obligations under the agreement to spend half the annual PILOT amount on downtown parking and half on a community center. Chair Salzburg said, “I believe it is bad faith to try to negotiate down the amount of the PILOT payment covering past years at this time.” OHPA commissioner Danny Fullwood moved and Commissioner Robert Sturgess seconded a motion for the OHPA to pay what it owes the city and to set a workshop with the city to determine a path forward. The motion passed unanimously, with the understanding that the money for repayment, which has not been finally determined, is available in escrow funds.
New Business – Port Director
Chair Salzburg introduced two topics for discussion and action. He suggested that each commissioner bring names of two citizens to the April meeting who might serve on a committee to develop a job description for a port director who would report directly to the board. Attorney Davis will draft a charge to the committee to develop such a document to include duties, structure and salary ranges.
While commissioners agreed on the need to fill such a position, also recommended by the recent citizen based charter review committee, the question of how to pay for such a position remains unresolved.
Currently, work of a port director has been unevenly spread among commissioners, a part time attorney and a part time administrator. The absence of such a position handicaps OHPA in aggressively pursuing business, keeping up with state legislative efforts and remaining in compliance with laws. Frank Santry, a member of the public, advised commissioners that meeting notices and information packets are not being properly noticed to the public, placing some board actions in jeopardy, should they be contested. Commissioner Robert Sturgess strongly agreed, citing statutory language that he believed OHPA was not currently following. Attorney Davis said that by default he has done some of this work for which he is not being compensated, adding that to pay for his time at an attorney’s rate is not good from OHPA’s standpoint.
Fullwood, seconded by Sturgess, moved to support Salzburg’s plan to move forward in forming the committee to draft the position description. The motion passed unanimously. Names of potential committee members will be considered at the April meeting.
New Business – Economics and Finance Committee
Chair Salzburg suggested forming a second committee of local qualified and interested citizens to assist the board in identifying possible solutions to current debt issues and to seek out economic development opportunities for OHPA. While some commissioners hesitated, preferring to see a port director in place first, the consensus was that getting started on such an initiative was important. Once again Fullwood and Sturgess moved and seconded a recommendation to establish and staff such a committee along the same lines as the previous committee. The motion was approved unanimously.
Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.